Wednesday, 29 June 2011

Ah, National Business Review, you crack me up

The National Business Review pointed last week to work by Andrea Ichino and Enrico Moretti on gender differences in absenteeism that seems utterly to vindicate Thompson's position. For readers abroad, a representative of the Employers and Manufacturer's Association was goaded in a TV interview into speculating about reasons for male-female wage differences. Among the more sensible and usual reasons - time out of the workforce, experience and so on - he noted some of his members had found higher rates of sick leave among female employees and speculated about whether menstrual cycles were to blame. [note: this is what I gather from an assortment of press reporting on the interviews, which I haven't seen]

You can guess what's happened since.

The National Business Review took the opportunity though of highlighting Ichino and Moretti's work suggesting that 28-day cycles in female sick leave are due to menstrual cycles and that increased work absence due to said cycles are responsible for a minor but significant part of the wage gap. The paper came out in one of the new AEA policy journals in 2009; here's an ungated working version. The paper's since been criticized by Rockoff and Herrmann; I'm not about to invest the time in sorting out who's right on this one.

But I love that somebody at NBR likely ran a Google Scholar search to see whether there was any lit to back up Thompson's ill-advised off the cuff remarks. That's a few notches above the rest of the media who just focused on the obviously correct point that you can't say what Thompson said in Thompson's position. Whether Thompson's remark was true is unfortunately second order relative to that some things just can't be said. I like that NBR took a bit of time to do some checking.

Eric, the paper seems to do nothing of the sort -- the finding (even assuming the research holds outside the Italian finance-sector context, and even if it's valid since it's based on an inference rather than on the results of an absence survey or &c) only explains 12% of the wage gap -- that being 12% of 12%; or 1.5 percentage points difference in the NZ context. It's extremely weak evidence to support a very bold claim by Alasdair Thompson.

@Lew: If Thompson claimed that differential sick leave based on menstruation accounted for anywhere near a majority of the wage gap, then you're right. But I didn't think that he did. I'd thought it was one of many candidate explanations he put up, among other more substantial ones like time out of the workforce for child care.

Note that the response to Thompson hasn't been "There's no way the effect is that large!" Rather, it's been "There's no way there's any kind of effect of that sort! And you're evil for thinking there might be!"

Note further that I remain agnostic about whether Moretti or Rockoff are right on this one. The best statement would be "While it is possible that increased use of sick leave due to menstrual cycles accounts for a relatively minor part of the gender wage gap, the academic literature has not achieved consensus on this point."

And note still further that, even if there were dozens of papers finding the same results as Moretti and backing Moretti against Rockoff, it wouldn't make a whit of difference for Thompson; he'd still be done.

@JC I don't see how this applies. Paid parental leave is available to parents regardless of gender. There is nothing stopping each parent taking half the allotted parental leave each, the mother can express breast milk if necessary for when the father is at home doing his share of looking after junior, or he can use formula.

Eric, I think this is a generous interpretation of AT's argument. He didn't put a figure on it, true; he has been extremely reluctant to repair to any sort of meaningful research throughout. But he did choose this explanation when confronted with an argument from evidence; and he did emphasise this factor over the (many) other possible explanations, and he did choose to defend this particular factor at considerable length and in high dudgeon after the fact, and the discussion of other factors was an afterthought. So we're entitled to infer from his behaviour that he considers it a (or the) major factor.

And I disagree -- I think he *could* have made this argument successfully if it had been done more sensitively, and if he had robust data showing a substantive difference to back his claim. I guess you're going to point to the recent furore about Kanazawa to contradict this, but as you say: his data was not robust enough to make a strong claim on.

@Lew: I've only skimmed the online vids. But surely his later excessive discussion of that factor was prompted by that being the one that reporters kept prodding him about, no? I'd say it points way more to exhaustion or poor media skills than to that he reckons it the major factor.

I've not watched the vids in anywhere near sufficient detail to draw any conclusions about how strong a factor Thompson reckoned it was. Nor am I going to. But it's interesting that while everybody else in the circus started going with the lashes, NBR ran a quick lit search to see if there was any plausible basis to his argument, even if Thompson didn't have that lit in front of him. I really like that there's at least one outlet that will try for a bit of fact checking before heading for a lynching.

Imagine you are an employer. Two equally good applicants. The first has even odds of taking a year off in the next five years and you'll be required to hire a temp. Hiring temps sucks. The second has no such risk. You are required to maximize shareholder value. What do you do.

Beyond the arguments to biology and culture, there's also a spiral effect -- because women are paid 12% less, all else equal there's an advantage within the family if the woman takes the unpaid leave, which hampers their career progression, which means there's an advantage ...

My experience of hiring both sexes is the blokes push for about 30-40& more salary and talk big ideas, the women push for 5-10% salary and how much they can save the company/organisation.

The women lower down the totem pole do indeed negotiate but its more about a work/life balance and is often implied more than a hard and fast number of hours off. If I was asked to explain a gender disparity I'd have difficulty putting in words the sort of implied tradeoffs that employer/prospective woman employee were making.

@Eric Yep, all else being equal I'd employ the one less likely to result in the inconvenience of requiring temp cover down the track. But if that candidate decided to make himself unavailable that still doesn't mean I'd pay the woman less were she subsequently employed.

Surely your argument is linked to relative employability levels. Are you suggesting that women need to take lower pay in order to make themselves more attractive to potential employers in the same way you argue for a lower youth wage?